Japan: Nikkei stocks plunge 1425 points (6.98%)

TOKYO, April 17 (Reuters) - Investors battered Tokyo stocks on Monday, slicing 6.98 percent off the benchmark Nikkei average at the close and analysts said worse could follow if last week's carnage on Wall Street resumed later in the day.

``It's like catching a falling knife right now,'' said Darrel Whitten, head of research at ABN Amro in Tokyo. ``We're still above our 200-day moving average, but below that we'd like to look around 17,500 as a support level.''

Traders said a planned reshuffling of components in the Nikkei average also served to drag the benchmark lower as investors rushed to dump outgoing stocks. Investors fled from both old and new economy shares.

The Nikkei closed down by its fifth biggest drop in both percentage and points terms, losing 1,426.04 points at 19,008.64, its lowest close since January 25.